Today the Supreme Court decided that Americans who buy health insurance on Healthcare.gov are eligible for subsidies to help them pay their premiums.
The decision shines a bright light on the oft-forgotten linchpin that holds the sweeping 2010 health care law together: The federal government is handing people significant amounts of money to pay their premiums.
Under the Affordable Care Act, popularly known as Obamacare, those who don’t have health insurance can buy plans on government-run marketplaces or “exchanges.” States may either set up their own marketplaces or opt to use the federal government’s marketplace, available on Healthcare.gov. Then, the government provides subsidies to help people afford the healthcare premiums.
The court case was about whether the law said the subsidies applied in states that didn’t set up their own exchanges. (The argument was over how to read one clause in the legislation.) The Supreme Court decided that health care subsidies should remain available to everyone who buys Obamacare plans.
The subsidies make a huge difference to the people who receive them: On the federal exchange, they’re worth an average of $272 a month.
Use this calculator from the Kaiser Family Foundation to see how much an Obamacare plan would cost you, and how much is covered by the subsidies:
And a lot of people qualify: 87% of people who bought Obamacare plans on the federal exchange got a subsidy. Anyone who makes up to 400% of the poverty line is eligible. In 2015, families of four that earned $95,400 made the cutoff.
Policymakers will continue to debate whether the subsidies are accomplishing the goal of making health care affordable. The Government Accountability Office recently found that subsidies “likely contributed to an expansion of health insurance coverage in 2014.” But it’s not like health insurance premiums are cheap, even with financial assistance from the government. After all, Americans who get health insurance at work pay less, on average: $90 a month for single coverage, according to the Kaiser Family Foundation. That’s up from just $27 a month 15 years ago.
And by the way, workplace coverage is (indirectly) subsidized by the government too, in the form of a tax break that makes it very attractive for companies to offer.